Financial services firms will have a new mandate to put consumers at the center of what they do under a plan laid out by the City regulator.
The Financial Conduct Authority (FCA) says this will spur a cultural change in companies and that senior managers will be held accountable.
Companies will have to provide consumers with information they can understand, deliver products and services that are fit for purpose, and provide helpful customer service.
Under higher standards, consumers will find it as easy to switch, cancel, and complain as when purchasing a product or service.
NS FCA said they’ve seen companies present information in a way that exploits consumer behavioral biases, sell products or services that are not fit for purpose, or provide assistance. poor customers.
Its 2020 Financial Life Survey found that just 10% of consumers strongly agree that they trust the UK financial services industry, with over 32% slightly agreeing. Only 35% of businesses agree to be honest and transparent in their dealings with them.
The FCA is consulting on the plans through February 15, and expects to confirm any final rules by the end of July 2022.
The regulator said it will act quickly when it identifies practices that are not working for consumers.
It says Parliament has also strongly called for a change to the consumer protection standard and its publication to meet the FCA’s obligations under the Financial Services Act 2021.
“Making good financial decisions is essential to financial health and trust, but too often, consumers,” said Sheldon Mills, executive director of consumer and competition at FCA. users are not provided with the information needed to make good decisions and are sold products or services that do not provide the benefits they might expect.
“We want to change that. We’ve been working to set a higher standard for companies, to push them to act in the best interest of their customers and make their products and services better. they fit.
“The new mission will drive a change in the culture at the companies. We expect companies to step up and put consumers at the heart of what they do, and we will hold senior managers accountable if they fail to do so.
“This obligation will also help create an environment of healthy competition between companies, encouraging them to innovate in developing products and services that meet consumer needs.”
Matthew Upton, policy director at Advice for citizens “Consumers should always get good service at a fair price. However, we often see companies willing to take the risk to get the role from the FCA, instead of playing fair in the first place.
“We welcome these proposals, which will make companies think twice before going against the best interests of their customers.
“The FCA has made it clear that it stands ready to take action against companies where necessary. The intent of the quest is that this won’t be needed as often as we’ve seen in the past, but the real test will come in whether it’s willing to do it when it matters. ”
https://www.independent.co.uk/money/firms-will-have-new-duty-to-act-in-consumers-interests-under-fca-plans-b1971109.html Companies will have a new mandate to act in the interests of consumers under FCA plans